Dividend yield scan: The highest yielding ASX stocks – Week 9

The dividend yield scan locates ASX 300 companies with a trailing yield of more than 8% and identifies the ones forecast to raise dividends in FY24.

There are currently 23 companies with a trailing dividend of more than 8% (the list excludes listed investment companies and trusts).

The Highest Dividend Yields

The below data is sorted from highest to lowest yield.

Data as at Wednesday, 28 February 2024 (Source: Refinitiv)

Sustainable Dividends – Nowhere To Be Found

Trailing dividend yields are going to be high for a reason – These companies paid out significant dividends a year ago followed by a substantial decline in share price, which inflates the trailing yield figure. Most of these companies are also very cyclical and cycling strong commodity prices and/or business conditions from 12-24 months ago.

I've taken a closer look at what analysts are expecting for these stocks (post reporting season) and very few will grow their nominal dividend payout year-on-year. A few somewhat resilient names include:

Nickel Industries (ASX: NIC): Citi expects NIC to pay a 3 cent dividend for the 2024 calendar year (down from 5 cents in 2022) amid a trough for nickel prices. The payout is expected to rise to 5 cents in 2025.

Incitec Pivot (ASX: IPL): Macquarie forecasts IPL to grow its dividend from 15 cents in FY23 to 18.4 cents in FY24. The only problem is that the company has already traded ex-dividend on 31 January for 10.1 cents. In FY25, its dividend is forecast to fall to just 8.7 cents amid weak fertiliser and ammonia prices.

Woodside (ASX: WDS): Surprised the market with a US$0.60 per share final dividend earlier this week. This was achieved by electing to payout the top end of its 50-80% net profit range. While resilient, Morgan Stanley expects weaker oil prices and high capex to bring its full-year 2024 dividend down to US$1.10 but rise to US$1.15 in 2025.

Air New Zealand (ASX: AIZ): Shares are down around 22% in the past twelve months. This weakness was reflected in the company's half-year result, where profit before tax fell 38% on softer demand and cost pressures. Macquarie analysts expect to see headwinds persist over the short term. As far as dividends are concerned, Macquarie expects dividends to fall to NZ$0.033 in FY24 (FY23: NZ$0.06), hit a trough of NZ$0.003 in FY25 and improve to NZ$0.005 in FY26.

Insignia Financial (ASX: IFL): Reported a first-half earnings beat on both earnings and revenue. The company also made upward revisions to its full-year guidance. Analysts broadly highlighted a stronger-than-expected performance, with better revenue margins driving the overall beat and significant improvements at Advice division. The segment posted positive EBITDA for the first time in years driven by significant cost reductions. IFL paid out 18.6 cents per share ordinary dividend plus a 1.2 cents per share special dividend in FY23. Citi's modelling expects FY24 ordinary dividends to be in-line with the prior year and rise to 20 cents per share in FY25.